Hi everybody, I hope you can help me on this one. I've been a creator on SL for quite some years now and it looks like I'm getting into trouble with my tax department (I'm living in Germany). They asked me to declare VAT and reach in a sales tax return. As far as I understood, there is no VAT on transactions between residents http://wiki.secondlife.com/wiki/Value_Added_Tax , so I never really worried about it. But after weeks of research and paying 3(!) absolutely clueless tax accountants for even more research, it doesn't seem so easy. So my questions are:
Does anyone of you European or - even better - German merchants pay VAT for sales in L$?
And if so, how do you declare it?
Since VAT would apply to each sale, I'd have to pay the VAT not only on my final income (the amount I withdraw), but also on all the money I spend for advertising, hiring people for customer support, modeling for vendor pics, and so on, ...right?
And how do you calculate the value of each L$? What do you use as receipts?
OR: If LL would be right and there's simply no VAT to pay on L$ transactions, what do I write into the sales tax return? Could I say my business partner is LL, a US based company, since the only transactions in "real" money are the transactions between LL and me?
Thank you so much in advance!